French jobless rate falls to near ten-year low

PARIS (Reuters) - France’s unemployment rate fell unexpectedly at the end of last year to its lowest level since the start of 2009, official data showed on Thursday, offering President Emmanuel Macron some relief on the economics front.

FILE PHOTO: Job seekers wait to speak with staff at a National Agency for Employment (Pole Emploi) office in Aubervilliers, near Paris, France, December 20, 2017. REUTERS/Benoit Tessier/File Photo

The INSEE statistics office said the jobless rate fell to 8.8 percent from 9.1 percent in the previous quarter, marking the lowest level since the first quarter of 2009 during the depths of the global financial crisis.

Economists polled by Reuters had forecast on average that unemployment would have remained stable at 9.1 percent.

The fall in joblessness offers Macron a boost as he struggles to restore his authority after the waves of “yellow vests” protests that started in November against high diesel prices and have since morphed into a broader movement against his government and its drive to undertake reforms.

Although jobs growth has slowed as the euro zone’s second-biggest economy struggled to gain momentum last year, thousands of new jobs are still being created.

That pushed the employment rate to 66.1 percent from 65.9 in the third quarter, to its highest level since 1980, INSEE said.

Elected in 2017 on promises to modernise the economy, Macron took aim at France’s stubbornly unemployment in his first major policy move by easing the country’s strict labour laws, which employers have long said is an obstacle to hiring.

Labour Minister Muriel Penicaud pinned the improvement in joblessness on the labour reform, which is due to be followed up this year with an overhaul of unemployment insurance.

“We want to beat mass unemployment, we’re not making cosmetic changes, but lasting changes,” Penicaud told franceinfo radio on Thursday.

She added that the government remained committed to reducing unemployment to 7 percent by the end of Macron’s term in 2022.

The fourth quarter improvement was all the more welcome because some firms have had to furlough workers as some restaurants and shops have had to close for repairs after protesters running amok during the “yellow vests” demonstrations smashed windows and destroyed property.

Penicaud said the government had earmarked 38 million euros (33 million pounds) to help pay for this impact.

Excluding French overseas territories where joblessness tends to be higher, the unemployment rate in mainland France fell to 8.5 percent in the fourth quarter from 8.8 percent in the third quarter, standing at its lowest rate since early 2009.